Question
Question two (a) The following was extracted from the standard cost card of Kafue Cement plc. Selling price 100kg pocket of cement K360 Direct material
Question two (a) The following was extracted from the standard cost card of Kafue Cement plc. Selling price 100kg pocket of cement K360 Direct material cost per 100kg pocket of cement K50 Direct labour cost per 100kg pocket of cement K50 Variable production overhead per 100kg pocket of cement K29 Other relevant cost information extracted from the budgets: Fixed production costs K9,750,000 Fixed selling and distribution costs K3,456,000 Sales commission 5% of selling price Sales 90,000 100kg pockets of cement. REQUIRED: 1. Calculate the breakeven point both in sales volumes (number of pockets) and sales value. (2 marks) 2. Calculate the margin of safety both in percentage and in volume. (2marks) 3. Suppose the selling price per pocket of cement was to be increased to K375 and the sales commission increased to 8% and a further K150,000 on advertising. Calculate the revised breakeven point sales volume based on suggestion in (3) above and comment accordingly.vvvv
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